Avio S.p.A. (AVIO) AI Stock Analysis

• Market Cap: €1.68B
• Dividend Yield: 0.41%
• Average Volume (3M): 656.74K
• Price to Earnings (P/E): 193.4
• Beta (1Y): 0.52
• Revenue Growth: 32.64%
• EPS Growth: -38.77%
• Country: IT
• Employees: 1,352
• Sector: Industrials
• Sector Strength: 72
• Industry: Aerospace & Defense
• EPS (TTM): 0.02
• Shares Outstanding: 46,789,543
• 10 Day Avg. Volume: 749,352
• 30 Day Avg. Volume: 656,743
• PEG Ratio: -7.50
• Price to Book (P/B): 1.16
• Price to Sales (P/S): 0.73
• P/FCF Ratio: 13.99
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: €36.75
• Price Target Upside: -1.47% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 62 Neutral
• Price Target: €36.00 ▼(-3.49% Downside)

The score is driven primarily by mixed financial performance—strong cash generation and a low-leverage balance sheet offset by weak profitability and margin compression. Technicals are supportive but look overextended (RSI/Stoch elevated). Valuation is the largest negative factor due to the very high P/E.

Positive Factors

Free Cash Flow Growth

Nearly 100% TTM free cash flow growth indicates substantially improved cash generation capacity. Durable cash inflows support funding of long-cycle R&D and program execution, reduce reliance on external financing, and provide flexibility to absorb schedule variability in launch contracts.

Balance Sheet Strength

Extremely low leverage and a strong equity ratio signal low financial risk and high capacity to fund capital needs internally. This conservatism supports bidding on large institutional programs, withstands cyclical revenue timing, and preserves strategic optionality over multiple years.

Strategic ESA & Program Positioning

Established role on Vega and Ariane programs and ESA partnerships creates durable, long-term institutional demand and high barriers to entry. This entrenched market position affords recurring contract pipelines, technological expertise, and credibility for future collaborative and export opportunities.

Negative Factors

Margin Compression & Negative EBIT

Sustained margin deterioration and negative EBIT point to persistent cost pressures or pricing stress. Reduced gross and operating profitability constrain reinvestment capacity, make program economics fragile, and heighten the need for structural cost fixes to restore long-term operational viability.

Weak Operating Cash Conversion

Very low operating cash flow relative to reported earnings signals earnings quality and working-capital timing issues. If sustained, poor cash conversion can strain liquidity during program ramp or delays, forcing reliance on FCF improvements or external financing to support contracts.

Modest Revenue Growth

Low top-line growth limits scale benefits and leaves the company dependent on a narrow set of programs. Without stronger revenue expansion or diversification, margin recovery must shoulder profit improvement, and competitive pressures in commercial launch markets could further constrain sustainable growth.

Avio S.p.A. Business Overview & Revenue Model

Company Description

Avio S.p.A., through its subsidiaries, engages in the design, development, and production of propellant propulsion systems for space launchers in Italy and internationally. It is involved in the design, development, and production of solid propellant propulsion systems for tactical missiles; development, integration, and supply of light space launchers; and research and development of low environmental impact propulsion systems, and satellite tracking control motors. The company also offers propulsion boosters, liquid oxygen turbo pumps, and aerodynamic control surfaces. It offers space launchers under the VEGA and ARIANE names. The company was founded in 1984 and is based in Rome, Italy.

How the Company Makes Money

Avio generates revenue primarily through contracts for the development and manufacturing of propulsion systems for space launch vehicles, including the Vega and Ariane programs. Key revenue streams include government contracts from national and international space agencies, commercial launch services, and partnerships with aerospace companies for joint projects. The company's involvement in the European Space Agency's initiatives and collaborations with other aerospace firms enhances its capabilities and market reach, contributing significantly to its earnings. Additionally, Avio's focus on research and development allows it to innovate and expand its product offerings, providing further avenues for revenue growth.

Avio S.p.A. Financial Statement Overview

Summary

Avio S.p.A. presents a mixed financial performance. The company shows positive revenue growth and strong free cash flow generation, indicating potential for future growth. However, declining profit margins and operational inefficiencies pose challenges. The balance sheet is strong with low leverage, providing financial stability. Overall, while there are areas of concern, the company maintains a stable financial position with opportunities for improvement in profitability and operational efficiency.

Income Statement

Avio S.p.A. shows a mixed performance in its income statement. The company has achieved a modest revenue growth rate of 3.88% TTM, indicating a positive trend in sales. However, the gross profit margin has decreased over time, from 33.14% in 2023 to 21.99% TTM, suggesting increased cost pressures. The net profit margin is low at 0.89% TTM, reflecting challenges in translating revenue into profit. The EBIT margin is negative, indicating operational inefficiencies, though the EBITDA margin remains positive at 5.08% TTM, showing some resilience in cash earnings.

Balance Sheet

Avio S.p.A.'s balance sheet reflects a stable financial position with a low debt-to-equity ratio of 0.036 TTM, indicating conservative leverage. The return on equity is modest at 1.94% TTM, suggesting limited profitability from equity investments. The equity ratio is strong, highlighting a solid capital structure with a significant portion of assets financed by equity. Overall, the balance sheet suggests financial stability with low risk from debt.

Cash Flow

The cash flow statement of Avio S.p.A. shows a robust free cash flow growth rate of 99.76% TTM, indicating significant improvement in cash generation. The operating cash flow to net income ratio is low at 0.045 TTM, suggesting that operating cash flows are not fully covering net income. However, the free cash flow to net income ratio is high at 0.97 TTM, demonstrating effective cash conversion from profits. Overall, the cash flow position is improving, but there are areas for enhancement in operating cash flow efficiency.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	395.27M	483.99M	343.70M	73.22M	324.14M	206.11M
Gross Profit	107.96M	130.03M	113.89M	72.40M	96.64M	105.57M
EBITDA	16.31M	23.97M	22.62M	21.45M	30.15M	35.34M
Net Income	2.69M	6.09M	6.49M	-435.00K	8.48M	14.12M
Balance Sheet
Total Assets	1.08B	1.09B	1.06B	1.29B	1.24B	1.12B
Cash, Cash Equivalents and Short-Term Investments	86.50M	101.68M	95.59M	131.40M	104.61M	124.67M
Total Debt	11.24M	11.59M	19.46M	56.95M	47.45M	62.03M
Total Liabilities	762.05M	779.52M	744.75M	982.10M	926.12M	810.48M
Stockholders Equity	310.59M	302.83M	300.62M	293.66M	302.48M	303.48M
Cash Flow
Free Cash Flow	8.26M	25.10M	6.14M	33.22M	7.54M	12.80M
Operating Cash Flow	11.46M	60.26M	42.48M	65.74M	41.26M	47.40M
Investing Cash Flow	-6.93M	-35.16M	-38.85M	-34.23M	-33.71M	-34.60M
Financing Cash Flow	10.20M	-19.01M	-39.44M	-4.72M	-27.59M	-32.44M

Avio S.p.A. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 37.30
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IT:AVIO, the sentiment is Positive. The current price of 37.3 is above the 20-day moving average (MA) of 30.35, above the 50-day MA of 29.09, and above the 200-day MA of 25.07, indicating a bullish trend. The MACD of 2.14 indicates Negative momentum. The RSI at 79.48 is Negative, neither overbought nor oversold. The STOCH value of 91.71 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for IT:AVIO.

Avio S.p.A. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
FCT	63 Neutral	€6.31B	50.54	14.30%	―	18.44%	―
AVIO	62 Neutral	€1.68B	193.36	1.96%	0.41%	32.64%	-38.77%
LDO	60 Neutral	€33.64B	32.13	12.10%	1.05%	14.13%	5.99%